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This represents a 10.8% per year compound growth rate, well down from 27.7% per year in the 2004 to 2008 period, but still substantial. One major reason for the slowdown in growth is that most of the richer countries are approaching saturation with broadband; new customers are becoming harder to find and sign up. At the same time poorer countries such as China and India have gone through the initial phase of rapid growth and are now growing steadily rather than exponentially.
Looking five years ahead, China is forecast to be well in front as the biggest broadband country, with 153 million broadband lines against 117 million in the USA. In fact China is expected to be already ahead of the USA by the end of 2008. India and Brazil are also expected to enter the Top 10, but Russia is forecast to be just outside at number 11.
The story with broadband take-up – the percentage of broadband lines per 100 population – will be rather different. Here Sweden, Germany and the USA are expected to be the biggest gainers as they start closing the gap with similar countries. Germany, which has been rather lagging in broadband until recently, is expected to gain most of all, increasing take-up from 26.4% to 42.4%.
Denmark is expected to remain the most broadband-intensive major country, going from 37.0% to 46.3% take-up.
Limits on growth
The forecasts assume that the recession will cut back the rate of growth in the more industrialised countries but will have little effect in the emerging economies. Where the recession is forecast to slow broadband growth its effects are expected to last through the second half of 2008 and the whole of 2009. The impact is forecast to be felt more heavily in the USA, the UK, South Korea, Australia and Hungary than in the other industrial economies.
China, Brazil, Russia and Viet Nam are expected to be relatively unaffected while India is expected to increase its relatively low take-up rate even in the recession. All the other 31 countries are expected to face a similar slowdown. When the forecasts are updated, in six months time, it will be possible to make the first assessment of how much the broadband market has been affected by recession in practice. Point Topic expects that the regular comparison of short-term forecasts with actual outcomes will help to provide a better understanding of the dynamics of the broadband market.
The other main factor limiting the potential growth of fixed-line broadband is simply the number of households and business premises available to receive it. Thus the social structure of a country tends to set an upper limit on total broadband take-up which needs to be taken into account when making comparisons.
Simply put, countries with bigger household sizes will tend to have lower broadband take-up per 100 people. For example, Denmark has only 2.16 people per home but the USA has 2.62. So, forgetting business usage and other complications for the moment, Denmark has a potential average demand of 46 household lines per 100 people but the USA only has room for 38.
Different business take-up can be responsible for the differences between countries but the effect is relatively small. Where good data is available it usually suggests that business lines account for about 10% of the total broadband market, except in the early stages of development where it can be much higher. Point Topic uses 10% as a default assumption where there is nothing better.
A growing number of businesses have multiple broadband lines, as do some homes. This will help to drive the total number of broadband lines above the total number of premises in the most broadband-developed countries, but the two totals will continue to be quite closely related, at least for the next few years.
Forecast methodology
Point Topic’s methodology for making these forecasts is based on tracking the percentage of premises of all kinds – both homes and workplaces - which have a broadband line.
Point Topic’s view of the broadband market is based on the idea that, as the market approaches saturation, the key issue for further growth is the percentage of non-user premises which can be signed up for broadband in each time period.
The total of premises includes all homes and workplaces passed by one or more broadband services. Point Topic looks at what proportion of premises with coverage have joined the broadband community in each period in the last few years. This historic takeup rate by non-broadband-using premises is used as the basis for estimating take-up rates in future.
If broadband coverage increases in a country then the number of available premises still without broadband may increase, so the number of new broadband lines added each year may also increase. But if coverage is static or only growing slowly the pool of non-user premises gets smaller and so the number of new lines added each year also shrinks.
Point Topic has published the full set of forecasts as a special addition to its Global Broadband Statistics service. It is available to all subscribers to the service for download here. A further set of forecasts which will break down the totals between DSL, cable and Next Generation Access technologies (FTTx etc) will follow within the next few months. |